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RISK IN CONTEXT

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Coronavirus Outbreak: Immediate Steps for Multinationals

Posted by Costa Zakis 24 January 2020

Several hundred cases and multiple deaths have been reported in the emerging coronavirus outbreak originating in the Chinese city of Wuhan. While most reported cases so far have been in China, others have been reported in Japan, Singapore, South Korea, Thailand, Vietnam, the US and Australia.

With World Health Organisation’s (WHO) declaration of a global health emergency, multinational organisations should take action now to protect their people and operations.

Far reaching risks

Coronaviruses can cause a variety of illnesses, from the common cold to highly severe diseases, such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). Commonly exhibited symptoms in the current outbreak include fever, cough, and difficulty breathing, according to the WHO; mild cases have resembled the flu.

Chinese authorities have restricted travel in Wuhan and elsewhere and airports in several major cities globally are conducting entry screening while the Centres for Disease Control and Prevention (CDC) recommends avoiding nonessential travel to the region. The Department of Foreign Affairs and Trade has published travel guidelines on their website and you should also monitor the Australian Department of Health’s website for regular updates.

Organisations with significant employee populations in China are at particular risk, while travel restrictions, supply chain disruptions, and employee absenteeism within vendors, suppliers, and other partners in-country could reduce productivity and efficiency for businesses headquartered elsewhere. Fears about the virus could also depress travel and tourism and adversely affect the global economy.

Taking action now

Multinational organisations are encouraged to review, test, and potentially update critical plans related to business continuity, crisis management, and crisis communications. While examining existing plans, consider the potential effects a worsening outbreak could have on employees, revenue, suppliers, reputations, and more and work with other stakeholders to prepare accordingly.

Pay particular attention to:

  • Travel policies. If travel to Wuhan is necessary, the CDC recommends avoiding contact with sick people; avoiding animals, animal markets, and meat and other animal products; and frequently washing hands. Returning travellers exhibiting symptoms should immediately seek care and avoid contact with others.
  • Employee wellbeing. Monitor updates from public health officials and governments and keep employees informed and educated about the outbreak and any steps being taken to safeguard their health. Encourage employees to remain home when sick and telecommute if the outbreak worsens.
  • Supply chains. Identify operational and revenue impacts from potential disruptions to key suppliers and vendors. Also consider the feasibility of sourcing goods, ingredients, and component parts from alternative suppliers.
  • Insurance coverage. Review applicable insurance policies, prepare for potential claims, and consult your broker if you have questions.
  • The impacts from a potentially worsening Wuhan coronavirus outbreak to your business could be severe but taking these steps now can help you better prepare, plan, and protect people and operations.

Costa Zakis

Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by Jardine Lloyd Thompson Pty Ltd (ABN 69 009 098 864, AFSL 226 827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions.